Shell-CNOOC JV Receives Government Approvals To Take Over New Petrochemical Complex In China

Shell-CNOOC JV Receives Government Approvals To Take Over New Petrochemical Complex In China

Nov 2, 2016

Beijing, China, November 2, 2016 -- Shell Nanhai B.V. (Shell) and China National Offshore Oil Corporation’s (CNOOC) 50:50 joint venture has officially assumed ownership of CNOOC’s ongoing project to build an ethylene cracker and several derivatives units, after receiving all the necessary government approvals. Following a final investment decision in March 2016, the project will now be owned and operated by the existing joint venture, CNOOC and Shell Petrochemicals Company Limited (CSPC).

Aerial photograph of Phase 2 Chemical zone

From left to right: Graham van’t Hoff, Executive Vice President for Royal Dutch Shell plc’s global Chemicals business and Mr. Dong Xiaoli, General Manager Assistant of CNOOC and General Manager of CNOOC Oil & Petrochemicals Co., Ltd

The facilities being built next to CSPC’s existing petrochemical complex in Huizhou, Guangdong Province will increase ethylene production capacity by 1.2 million tonnes per year. Around 70% of the construction work is now complete and the new facilities are expected to start up around the fourth quarter next year. The expansion project will also include the largest styrene monomer and propylene oxide (SMPO) plant in China.

“Today marks another positive step for Shell’s Chemicals business,” said Graham van’t Hoff, Executive Vice President for Royal Dutch Shell plc’s global Chemicals business. “With our strategic partner CNOOC, we are pursuing growth in the expanding Chinese petrochemicals market, and delivering to meet the needs of our customers. The focus is now on best in class project delivery.”

Dong Xiaoli, General Manager Assistant of CNOOC and General Manager of CNOOC Oil & Petrochemicals Co., Ltd said: “We are delighted to expand our cooperation with Shell by using its industry-leading technology. These government and regulatory approvals complete the official handover from CNOOC to CSPC and are an important step towards producing more petrochemicals for China’s growing domestic markets.”|

Shell will apply its proprietary OMEGA, styrene monomer and propylene oxide (SMPO) and polyols technologies to produce 150,000 tonnes per annum (tpa) of ethylene oxide, 480,000 tpa of ethylene glycol, 630,000 tpa of styrene monomer, 300,000 tpa of propylene oxide, and 600,000 tpa of high quality polyols. This more than doubles the volumes and range of CSPC’s high quality products to around 6 million tonnes per year. It will be the first time that Shell’s industry-leading OMEGA and advanced polyols technologies are applied in China.

The CSPC site, which has a strong track record of reliable and safe operations, currently converts a variety of liquid feedstocks into olefins and derivative products. These are used in a wide range of consumer goods, including computers, plastic bottles, cars, furniture, washing liquids and personal care products.

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Notes to Editors:

About Shell in China

All Shell’s core businesses have operations in China.

Shell has onshore and offshore gas and oil development projects in partnership with PetroChina and CNOOC, both inside and outside China, which help to fuel the country’s fast-growing economy.

Shell’s Downstream business in China consists of 11 joint ventures and eight wholly-owned companies. In China, Shell is one of the leading international lubricants providers, and international bitumen manufacturers and marketers. Shell has a large network of around 1,200 petrol stations in China, operated through joint ventures. Shell also has 4 lubricants blending plants, 1 grease plant and 4 bitumen plants in the country.

Shell Energy (China) is a new addition to the Downstream businesses in China. It is Shell’s Chinese trading entity and is actively engaged in the country’s burgeoning CO2 trade.

About CNOOC

CNOOC has evolved from an upstream oil and gas company to an international energy company with promising core businesses and a complete industrial chain.

CNOOC businesses cover the main segments of oil and gas exploration and development, engineering and technical services, refining and marketing, natural gas and power generation, and financial services.

About CSPC

CNOOC and Shell Petrochemicals Company Limited (CSPC) was established in 2000 and commenced operations in 2006. It operates a world-scale petrochemical complex (known as “Nanhai”) in the Daya Bay Economic and Technological Development Zone, Huizhou, Guangdong Province. The joint venture partners are Shell Nanhai B.V., a company within the Royal Dutch Shell Group, with a 50% stake, and CNOOC Petrochemicals Investment Limited (CPIL), also with 50%. CPIL is owned by China National Offshore Oil Corporation (CNOOC) (90%) and Guangdong Guangye Investment Group Company Limited (10%). CSPC currently has over 1,100 employees.

Nanhai has a current capacity to convert 950,000 tonnes of ethylene per year into 2.7 million tonnes per year of derivative products to supply to the Chinese domestic market. CSPC has been implementing a strategy of sustainable development and delivering Responsible Care commitment in operating the complex. It is a highly successful venture that has been a top performer in Health, Safety, Environment, Reliability and Operational Excellence.

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